Law Governing Credit Practice – KASNEB Syllabus

PAPER NO.10    LAW GOVERNING CREDIT PRACTICE

GENERAL OBJECTIVE

This paper is intended to equip the candidate with the knowledge, skills and attitudes that  will enable him/her to apply principles of credit law in an organisation.

LEARNING OUTCOMES

A candidate who passes this paper should be able to:

  • Identify the securities available in lending
  • Comply with the procedures and methods of creation of securities
  • Identify the rights and duties of lenders and borrowers
  • Demonstrate knowledge of Bankruptcy and Insolvency

CONTENT

Introduction to securities

  • Meaning of a security
  • Types of securities
  • Advantages and disadvantages of collateral
  • Formation of the contract
  • Qualities of a good security
  • Enforcement and perfection of securities

Land as security

  • Meaning of land
  • Land tenure: freehold and leasehold
  • Advantages and disadvantages of land as security
  • Creation of charges and mortgages
  • Procedure for perfecting title to land as security
  • Rights and duties of the parties to a charge and mortgage
  • Remedies
  • Release of security

Intellectual property as collateral

  • Meaning of intellectual property
  • Types of intellectual property
  • Procedures for perfecting a security interest in intellectual property
  • Advantages and disadvantages of using intellectual property as
  • Rights and duties of the parties
  • Remedies
  • Discharge of security

Chattel securities

  • Meaning of a chattel
  • Creation of chattel mortgages
  • Parties to a contract of chattel mortgage
  • Rights and duties of the parties
  • Remedies
  • Discharge

Guarantees and Indemnities

  • Meaning and characteristics
  • Formation
  • Rights and duties of the parties
  • Common clauses in guarantee and indemnity
  • Termination of guarantees and indemnity
  • Advantages and disadvantages of guarantees and indemnities

Bailment, pledge and lien

  • Meaning and characteristics
  • Formation, rights and duties of the parties
  • Remedies for breach, termination

Corporate securities

  • Meaning and characteristics
  • Debentures
  • Charges
  • Remedies of a debenture holder
  • Shares and corporate bonds
  • Common clauses in corporate bonds

Government borrowing

  • Treasury bills
  • Treasury bonds
  • Borrowing by County Government

Regulatory Framework for lending institutions (excluding banks)

  • Co-operative societies
  • Savings and credit cooperative societies (Sacco’s)
  • Micro finance institutions
  • Mobile money transfer services industry
  • Prudential Guidelines for lending Institutions

Corporate governance

  • Meaning of corporate governance
  • Importance of corporate governance
  • Principles of corporate governance
  • Best practice in corporate governance
  • Role of Stakeholders (Shareholders, Board of Directors, Government)
  • Conflict ofiInterest
  • Investor education and protection of shareholders

Consumer Protection in Credit Agreements

  • Credit card agreement
  • Disclosure
  • Unauthorised charges
  • Insurance
  • Correcting of errors
  • Deferral of payments
  • Default charges
  • Prepayment

Emerging issues and trends



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